Probate

Introduction

When a loved one dies, there are many things that need to be done immediately despite the difficulty of doing them in the midst of one's grief. These include registering the death, arranging the funeral, and giving notice to family and friends. It is also important to start probate procedures as soon as practical so that your loved one?s property can be transferred to the heirs. Your lawyer can guide you through the process so that you avoid problems and take advantage of cost-saving opportunities.

Requesting a Death Certificate

It is usually advisable to obtain about 10 copies of the deceased's death certificate in order to have a sufficient number during the probate process. A death certificate is used to start probate and may be required by banks, employers, insurance companies, government agencies, and other organizations that need official proof of death prior to processing benefit claims. If there are many different stock, bond or real estate holdings, you may need more.

Starting Probate

The probate laws of each state provide procedures for transferring property to a deceased person's spouse, children and other heirs. These laws assure payment of the deceased's creditors and protect the rights of beneficiaries. Before the deceased?s property can be distributed to heirs, probate laws require specific actions, including filing of the will, appointment of a personal representative, and payment of bills and taxes. If there is no will a similar application is made to the court. Probate is usually completed within 12 months, though it can take longer for a complex estate or shorter for a simple estate with few assets.

Searching for Will

Many people leave their will with the lawyer who wrote it. Other times the will can be found in a safe deposit box, a file cabinet, desk drawer, or in the possession of a trusted friend or relative. Your lawyer can help you search for the will and advise how to gain access to the contents of the deceased?s safe deposit box. Most lawyers recommend not leaving the will in a safe deposit box in the decedent?s name alone, since the time it takes to get the box opened will delay the process.

Dying Without a Will

If there is no will, your loved one's property will be divided according to state law which might be different from what the deceased would have wished. Dying without a will can be costly and may complicate the transfer of your loved one's property to heirs. For example, the estate may have to pay bond premiums if there is no will stating that executors and guardians are not required to post a bond. In addition, estate administration proceedings without a will may delay transfer of property to heirs. Your lawyer can advise you about how to proceed if you are unable to find a will for your loved one.

Appointing a Personal Representative

In most states, probate will involve appointment of a personal representative or executor to carry out the instructions in a will. The will commonly includes the name of that personal representative and sometimes an alternate. The court will select a personal representative if the named person is unable or unwilling to serve. Similarly, the court will appoint the personal representative (sometimes called an "administrator") where there is no will.

Managing the Decedent's Property

It is the job of the personal representative to manage the deceased person's property, pay bills and taxes, and distribute the property according to the instructions in the will or as provided by law if there is no will. The personal representative is also responsible for collecting debts owed to the deceased and recovering property that is in the possession of others. Your lawyer can help you locate the deceased's property and determine which debts must be paid.

Cost of Probate

Probate expenses are deducted from the deceased's property before it is transferred to the heirs. They can include bond premiums for the personal representative, publication costs for notices, court costs, and fees of the personal representative as well as the cost of professional advisors such as appraisers or accountants. Your lawyer can help minimize these costs by negotiating fees with professional advisors and utilizing strategies like waiving of bonding requirements. The legal fee is commonly based on a percentage of the estate or on an hourly basis. Your lawyer can discuss this with you in advance.

Court Supervision

Judges oversee probate proceedings in most states. A judge will appoint the personal representative and issue a document commonly called "letters testamentary" or "letters of administration" showing that the personal representative is authorized to act on behalf of the deceased person. A judge may also be called upon to decide issues that arise during probate like the validity of the will, the qualifications of the personal representative, and the priority of distributions.

Handling Small Estates

Many states have adopted laws that streamline probate procedures for small estates. These laws set a maximum value for estates that qualify for the expedited procedures. The small estate laws usually reduce the paperwork burden and eliminate the need for court supervision. Simplified procedures are commonly available whether or not there is a will. Your lawyer can help you determine whether simplified probate is available for distribution of the deceased's property.

Paying Taxes

Your lawyer can help you prepare and file tax returns that are required for the estate. A federal income tax return must be filed for the year of death.  It may also be necessary to file a state income tax return for that last year. A federal estate tax return is due nine months following death if the value of the estate is greater than the threshold amount specified in the Internal Revenue Code. Depending upon local law and the size of the estate, a state inheritance tax return may also be due. This tax is due when the return is filed. If the estate has not yet sold property to pay the taxes, your lawyer may be able to negotiate with the taxing authorities to pay later, but interest and penalties can apply.

Transferring Non-Probate Assets

Some of a deceased person's property may be transferred outside of the probate process. For example, money in an individual retirement account (IRA) and joint-tenancy or payable-on-death accounts can be transferred without probate. Life insurance proceeds and retirement account benefits can also be transferred without probate if the deceased named a beneficiary. Your lawyer can advise whether any of the deceased person's property can be transferred without probate and help you satisfy requirements for these distributions.

Living Trusts

Many lawyers now recommend setting up "Living Trusts" during one's lifetime to help simplify probate. If your decedent has a Living Trust, your lawyer can again help with the transfer of property, any required probate procedures and any tax obligations. Your lawyer can also help you decide whether you should create a living trust for yourself. Living trusts have been used by many people to manage their property in case of death or disability.

Claim Social Security Benefits

The Social Security Administration administers the benefits available to a deceased person's spouse and dependents. These benefits include a small death benefit for funeral expenses and survivor's benefits for spouses and children. Survivor's benefits are available to spouses over 60 and to spouses under 60 who care for the decedent's dependent or disabled children.

Obtain Veterans Benefits

The Department of Veterans Affairs administers the benefits available to survivors of a deceased veteran. The benefits include a small benefit for funeral expenses and a limited burial allowance for veterans whose death is service-connected. Burial in a national cemetery is free to veterans, their spouses and dependent children. Veterans are also eligible for a free burial flag and headstone. The surviving spouse and dependent children of disabled veterans may also be entitled to a death benefit as well as to educational assistance and medical care.

Request Emplyoee Benefits

The personal representative should contact all past employers, unions, and professional organizations to see if there is any compensation or other benefits due to the deceased. Many companies provide life insurance and it may be possible to continue health insurance coverage for the family. Your lawyer can advise you about tax strategies when electing options under life insurance policies and retirement plans.

Watch Out for Fraud

The personal representative may have to make sure that the deceased's personal property remains secure, especially if the person lived alone. Be cautious to safeguard your loved one's property from thieves and from fraudulent claims. Seek your lawyer's advice if you suspect that someone is making an unjustified claim. Your lawyer can examine the claim and assess whether it is appropriate for the estate to pay it.

Consult Your Lawyer

Your lawyer can help you through the probate process and handle disputes with creditors and beneficiaries. Your lawyer can prepare and file court documents, arrange for the filing of tax returns, and handle the various documents needed to transfer the deceased person's property to heirs. Your lawyer can also advise you about social security benefits, employee benefits, veterans' benefits, and state inheritance laws that protect the surviving spouse and other heirs.

Conclusion

The passing of a loved one is a stressful time filled with emotion. It also requires immediate action to protect the property of the deceased and the welfare of the survivors. It is important to proceed with probate as promptly as possible so that the assets can be safeguarded, creditors paid, and property turned over to the heirs. Your lawyer can help you with the process, answer your questions, and recommend actions to protect the deceased's family and other heirs.